Telematics at UPS: En Route to Energy Informatics

TelemaTics aT UPs: en RoUTe To eneRgy

Q MIS
Uarterly infoRmaTics1,2
E xecutive

Richard T. Watson Executive Summary

University of Georgia
(U.S.) With a large fleet of trucks and planes, the level of fossil fuel consumption is always
important to UPS. This article describes how UPS has improved safety, reduced
mileage, lowered emissions, and cut maintenance costs by gathering information every
Marie-Claude
day using proprietary firmware installed in its trucks. This telematics-based project at
Boudreau UPS demonstrates how companies can create and exploit opportunities for digital data
University of Georgia generation and then use the power of information to motivate changeincluding changes
(U.S.) that advance sustainability objectives. In this article, we also describe how the UPS
telematics project fits an Energy Informatics Framework. This framework can be used as
Seth Li a road map for other organizations seeking to both increase their profitability and reduce
University of Georgia carbon emissions via improved energy efficiency.
(U.S.)

Jack Levis
GOING GREEN AT BROWN
UPS (U.S.) UPS is committed to operating our business in a socially, environmentally,
and economically responsible manner.3
Telecommunication
occurs when the As the worlds largest package delivery company, UPS continually monitors
exchange of information its consumption of fossil fuels, a significant source of CO2 emissions into the
between communication
participants atmosphere. Indeed, with its 94,500 vehicles, 2,909 facilities, and as the ninth-largest
includes the use of airline worldwide, fuel consumption accounts for about 5.6% of UPSs operating
technology.
revenue. In the interest of profitability, UPS thus seeks to reduce its fuel consumption.
This objective also aligns with UPSs desire to be a socially responsible corporation
Telematics - the technology of and to reduce global warming: being green is good for business and good for the
sending, receiving and environment.
storing information via
telecommunication devices in
conjunction with effecting Brown (a nickname for UPS) is already a global leader in synchronizing
control on remote objects the movement of goods, information, and funds, and is now in the process of
implementing a telematics-based4 project that reduces energy consumption and
informatics - the component waste (and thus its costs). This project illustrates the emergence of a
science of processing new subfield of information systemsenergy informaticswhich is concerned with
data for storage and
retrieval; information analyzing, designing, and implementing systems to increase the efficiency of energy
science. demand and supply systems.

MISQE is In this article, we describe how the telematics project has resulted in increased
Sponsored by business value for UPS. We also illustrate how telematics fits into a general Energy
Informatics Framework, which can be used by other organizations seeking to increase
their energy efficiency.

1 Jeanne Ross and Carol Brown are the accepting Senior Editors for this article.
2 An earlier version of this paper, UPS: En route to Energy Informatics, received first place in the Society
for Information Management (SIM) Best Paper Award competition for 2009. The authors are most thankful for
the information and comments provided by the following UPS personnel: Linda Bradford, Dave Bradley, Mark
Davidson, Matt Hendrix, and John Olsen. The Advanced Practices Council (APC) of SIM generously funded this
research.
3 See http://investor.shareholder.com/ups.
4 The Oxford English Dictionary defines telematics as The science of the long-distance transmission of
computerized information. (See http://dictionary.oeditioncom/cgi/entry/50248435?single=1&query_type=word
&queryword=telematics&first=1&max_to_show=10).

2010 University of Minnesota MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 1
Watson et al. / Telematics at UPS: En Route to Energy Informatics

TECHNOLOGY TO ACHIEVE Theres no IT strategy, only a business

strategy.8
GREATER EFFICIENCY
This philosophy is at the core of UPSs telematics
Since its foundation, UPS has always had a strong
project, which has increased business value as
focus on ensuring that tasks are executed efficiently
measured in terms of social, environmental, and
(UPSs background is described in the panel). Jim
financial benefits. In the next section, we describe the
Casey, the founder of UPS, ran lean operations;
technology supporting UPSs telematics project.
he continually sought means to reduce expenses.
Efficiency is therefore embedded in the UPS culture,
as illustrated by the maxim of the companys Package Flow Technology
industrial engineers: In God we trust, everything else Package flow technology, developed and first used
we measure.56 by UPS in 2003, is the technology upon which the
telematics project builds. Its purpose is to determine
UPS Background6 the most efficient route for drivers. At the heart of
package flow technology is Package Level Detail
In 1907, Jim Casey and Claude Ryan founded the (PLD): a label on every package contains detailed
American Messenger Company in Seattle, WA to package-related information, such as delivery address,
deliver messages. Package delivery started in 1913 time frame requested, and delivery method. Package
with the formation of Merchants Parcel Delivery, flow technology also includes a Dispatch Planning
following a merger with a Seattle competitor. When System (DPS), which plans each drivers route and
extending beyond Seattle to Oakland, CA in 1913, load for the most efficient delivery. It creates a Pre-
the firm was renamed as United Parcel Service Load Assist Label (PAL), which ensures that each
to describe its new mission. By 1975, UPS had package is placed on a specific shelf in a designated
established services in the 48 contiguous states of truck for maximum efficiency.
the U.S. The following year, it expanded beyond
North America to open operations in Germany. As Another key element of UPSs package flow
demand for express air delivery increased, UPS technology is the Delivery Information Acquisition
purchased its first aircraft in 1981. To optimize its Device (DIAD), a handheld computer. Every driver
flight schedules, UPS implemented some of the has a DIAD containing the daily delivery schedule
most advanced information systems in the world, for each package on that drivers route and the most
such as Computerized Operations Monitoring and efficient order of delivery. Schedules are not static
Planning and Scheduling System (COMPASS). and can be changed if unexpected situations arise,
Today, it operates in more than 200 countries and such as a route change to avoid road construction.
delivers over 15 million packages daily. Building An audible alarm also sounds if a driver is about to
on its capabilities to operate the worlds largest deliver a package to the wrong address or a delivery is
package delivery company, UPS also offers supply overlooked.
chain, logistics, and distribution services. Through
more than a century of growth and innovation, UPS Package flow technology enabled UPS to cut its daily
has become a global leader in synchronizing the delivery driving in 2008 by 30 million miles (48
movement of goods, information, and funds. million km). This translates to over 3 million gallons
(11.4 million liters) of fuel saved. It also meant that
over 30,000 metric tons of CO2 were not added to the
To help improve efficiency, UPS spends atmosphere.
approximately $1 billion per year on information
technology and information systems to run its
business and serve its customers.7 But this doesnt Transforming Data into InsightsThe
mean that technology drives the companys business Rise of Telematics
plans. As the companys CIO, David Barnes, A constant focus on doing better is embedded in
commented: UPSs culture. In 1948, founder Jim Casey asserted:

5 Niemann, G. Big Brown: the untold story of UPS, Jossey-Bass,

2007, p. 8.
6 UPS background information is drawn from Niemann, G., op. cit.,
2007; Brewster, M. and Dalzell, F. Driving change: the UPS approach
to business (1st edition), Hyperion, 2007; and from ups.com. 8 See http://www.pressroom.ups.com/About+UPS/UPS+Leadership/
7 Brewster, M. and Dalzell, F., op cit., 2007. Speeches/David+Barnes/Redefining+IT%27s+Value+to+the+Enterprise

2 MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 2010 University of Minnesota
 Telematics at UPS: En Route to Energy Informatics

We must be a step ahead in our thinking sent to UPSs data center in Mahwah, NJ, where it is
never once believing that we have reached analyzed using proprietary algorithms.
perfection in anything.9
Time-stamped location data is also captured by each
Although package flow technology generates drivers DIAD when a package is delivered. As a
important benefits, UPS believes there is still potential result, data collected by a drivers DIAD and the
for greater efficiency. For example, the status of each trucks firmware can be readily combined because
delivery trucks condition is monitored to improve they share a common element: a Coordinated
safety. In addition, although UPS had made many Universal Time (UTC) time stamp.
efforts to transform its vehicle fleet to be more
environmentally friendly,10 it believes there are still From the data collected, UPS can extract information
many untapped opportunities to reduce its carbon such as: what route did the driver take between the
footprint. Package flow technology was just the start; delivery at 125 Lenox Rd. and 15 Avalon St.? UPS
more can be done. has written software so that a supervisor can replay
a drivers complete route for a day and use this
Despite the broad dictionary definition of telematics visual display and other reports to work with drivers
cited previously, the term is today sometimes often to reduce the distance they drive and the fuel they
associated more narrowly with GPS technology and consume. This data is also used to improve safety by
vehicles.11 Fleet managers have become interested in ensuring compliance with UPS and community safety
telematics because modern vehicles, including UPSs standards. For example, UPS can extract information
trucks, contain technology to sense the state of the such as: when did the driver fail to buckle up after a
vehicle and make it available via an automotive bus.12 delivery?

In 2007, UPS successfully piloted telematics in more To support the generation of these and other valuable
than 300 of its delivery trucks in Roswell and Athens, insights, two senior UPS engineers (John Olsen
GA. In 2008, it expanded the pilot to 1,500 additional and Mark Davidson) took the lead to develop,
vehicles in 10 cities across the country and one in respectively, the necessary applications to analyze
Canada. In 2009, it further expanded the telematics the extensive data collected (back-end) and the
project to an additional 56 locations and 10,000 necessary interfaces to share information with
drivers. drivers and managers of all ranks (front-end). Both
Olsen and Davidson described their work as feeding
UPS has developed proprietary firmware to collect from the experience of the people in the trenches.
and record the state of its vehicles from the wide As UPS veterans of over 30 years, they have deep
variety of buses found in its vehicles. As a result, domain knowledge across many aspects of the firms
UPS has access to more than 200 items of vehicle- operations. To help make sense of the data and
related data, such as RPMs, oil pressure, seatbelt use, understand how best to communicate it to others,
the number of times the truck is placed in reverse, they spend most of their time in the UPS Roswell
and the amount of time spent idling. UPS captures depot so they can interact frequently with the drivers,
this time-stamped data constantly throughout the supervisors, and mechanics who use the systems
day. The firmware also includes a GPS chip so that reports.
a location can be attached to each data point. The
newest devices also have an accelerometer. The data Back-End Development. Olsen and his team of
collected provides 2,000-5,000 readings every day advanced business analytics experts use data analysis
for each truck. Data collected during parcel delivery techniques to identify patterns in the data and,
is transmitted automatically from the truck to a where necessary, to interpret the patterns and make
receiver in its local hub at the end of day and is then recommendations. The team estimates that it took four
to five years to collect sufficient data for data mining
9 Hess, E. D. and Kazanjian, R. K. The Search for Organic Growth, to become successful. For example, team members
Cambridge University Press, 2006. noticed that high fuel consumption was always
10 For a description of how UPS adopted hydraulic hybrid detected when a truck was idling; but once the truck
vehicles (HHVs), see http://pressroom.ups.com/Fact+Sheets/
UPS+First+In+Industry+to+Purchase+Hydraulic+Hybrid+Vehicles. started moving, the fuel consumption rate dropped.
11 See, for example, Goel, A. Fleet Telematics: Real-time This realization led them to accumulate more data
Management and Planning of Commercial Vehicle Operations, on idling habits and, eventually, to make appropriate
Springer Verlag, 2007.
12 Nolte, T., Hansson, H., and Bello, L. Automotive Communications recommendations regarding this practice. As a result,
- Past, Current and Future, 2005 (available at http://www.mrtc.mdh.se/
publications/0920.pdf).

vehicle bus is a specialized internal communications network that interconnects components inside a vehicle
2010 University of Minnesota MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 3
Watson et al. / Telematics at UPS: En Route to Energy Informatics

idling time per truck has been reduced by an average report on events that violated established safety
of 15 minutes per day. practices or efficiency policies.

Although it is a challenge to interpret the data, it helps Deployment of Telematics. Along with Olsen and
to have it well organized: Davidson, Linda Bradford is a key person on the
telematics team. Bradford is in charge of operations
There are basically two types of data we are
deployment, which is also concerned with behavioral
focusing onred code and green code; red
changes. From the start, UPS was aware of the
code refers to automotive data that tracks
challenge of persuading its drivers of the benefits
performance of every vehicles components. If
associated with the constant monitoring of all
a problem is found in red code data, we need
facets of their driving and package delivery. The
to send the truck to maintenance and fix the
company embarked on an extensive driver training
specific component. Green code refers to data
and education program and also conducted several
related to environmental factors, like carbon
campaigns to inform the drivers, union agents, and
dioxide emissions. There is a smart control
driver safety committees how telematics works and
on the green code data that allows us to react
why it is important.
on the same day if any problem happens.
(John Olsen, Senior Engineering Manager, UPSs communications with its drivers were highly
UPS Automotive Engineering Research and transparent: examples of reports resulting from the
Development) analysis of the collected data were shared with them
to make them aware of precisely what was recorded.
Since data is captured and analyzed on the
Drivers were also informed how their individual
performance of nearly all of a vehicles components,
driving performance compared against a peer
unusual patterns can be quickly identified and traced
benchmark. The reports include metrics such as the
back to the problematic component. This ensures
number of minutes idling or the number of times a
vehicles are maintained in good condition, drivers are
vehicle was driven without the bulkhead door being
safer, and customers are more satisfied.
locked. Overall, Bradford was happily surprised by
Front-End Development. Once information has been the drivers acceptance of the telematics system:
extracted from the collected data, the results need to Our drivers responded very favorably during
be communicated to the appropriate stakeholders. For our training. Once drivers were aware of
example, an interface specifically designed to provide how they could improve safety, they typically
information about a drivers performance is equipped improved dramatically the next day after our
with an instantaneous alert if a driver has performed reviews.
certain unsafe procedures on the most recent delivery
route. Usability is the first priority when designing When telematics is deployed in a depot, it takes about
interfaces: seven weeks to complete education about the new
system. A campaign typically includes a 20-minute
Our first-line managers have tremendous
presentation, often focusing on safety aspects.
demands on their time on a daily basis. Our
Implementation programs are regularly revised based
main usability requirement for operations
on any new safety and efficiency insights emerging
managers was to create an interface where
from the constant analysis of the data collected every
they could get what they need with minimal
day. Education on the telematics reporting system is
effort and time. This required us to create
now incorporated into the training of new drivers.
algorithms to analyze thousands of data points
combined from our DIADs and telematics
systems to give our first-line managers specific Telematics Benefits
feedback and instructions on opportunities The currently recognized benefits associated with
to improve safety, service, fuel efficiency, UPSs telematics project fall into all three areas of the
and route performance. (Mark Davidson, companys commitment towards sustainability: social,
Region Engineering Manager, UPS Industrial environmental, and financialsometimes referred to
Engineering Research and Development) as the triple bottom line.13
Exception reporting is at the core of communications
13 Savitz, A. W. and Weber, K. The Triple Bottom Line: How
with supervisors and drivers. The system will only Todays Best-run Companies Are Achieving Economic, Social and
Environmental Success - And How You Can Too (1st edition), Jossey-
Bass, 2006.

4 MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 2010 University of Minnesota
 Telematics at UPS: En Route to Energy Informatics

The general sense among those involved in analyzing delivery location to determine if it was a residential
UPSs telematics data is that there is still much or commercial event, because reversing might be the
more to learn. They also believe that telematics can only option when a driver has to back into a businesss
potentially be applied to other areas, such as UPSs loading dock. Some drivers have requested a daily
fleet of tractor trailers. The companys dedicated report of their driving behavior so they can improve
deployment team communicates new benefits and their performance. One driver used the backing-
insights as they are identified to relevant personnel. up events report (see Figure 1) to decrease his daily
reversing from around 40 events to four and has set a
Social Benefits. Social benefits mainly relate to personal goal of reducing this to zero. Control Dimension
the truck drivers increased safety. By monitoring
driving patterns in fine detail, UPS managers have UPS managers now need to perform minimal
the ability to recommend safer driving habits. For supervision of safety habits, as drivers use the
example, although the seat belt compliance rate was telematics reports to self-correct. Managers report
high (98%), UPS was able to determine when seat that safety events (e.g., seat belt usage, backing-up,
belts were not used in the remaining 2% of the time locking the bulkhead door, etc.) improve significantly
and was able to provide specific recommendations to the day after they are reviewed with drivers.
increase usage. As a consequence, buckling-up has
increased to an almost-perfect 99.8%. Lastly, because telematics provides complete
information about the mechanical and electrical
Another safety goal is to reduce the number of times conditions of UPS vehicles, truck reliability has been
that trucks are driven in reversea behavior UPS increased, which also results in increased safety for
drivers are trained to avoid for safety reasons drivers and the communities in which they drive.
by about a fourth. UPS knows from prior data
analysis that the likelihood of an accident increases Environmental Benefits. Telematics allows UPS
significantly when trucks are driven in reverse, to achieve environmental benefits by pinpointing
because a drivers visibility is then reduced. opportunities to reduce mileage, fuel consumption,
Reversing distance, time, and speed are linked to and replacement parts. The initial deployment of

Figure 1: A Truck Backing-Up Events Report

2010 University of Minnesota MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 5
Watson et al. / Telematics at UPS: En Route to Energy Informatics

Figure 2: An Idling Time Event Report

package flow technology was largely responsible and that there are over 90,000 UPS trucks worldwide,
for the optimization of truck dispatch. By combining fully deploying telematics to all vehicles would
package flow technology with telematics data, produce considerable savings in fuel. In addition,
efficiency gains have been taken to the next level. since an idling vehicle emits 20 times more pollution
than one traveling at 32 mph,15 minimizing idling time
The main environmental benefit directly associated for all deliveries across the large UPS fleet would have
with the telematics project is reduced fuel a significant environmental impact.
consumption. There are several ways of reducing
consumption. One approach is to create more fuel- The environment also benefits because fewer used
efficient routes for each vehicle. For instance, if a parts from UPS vehicles now need to be dumped in
particular vehicle has its highest fuel efficiency at landfill sites. Telematics data has enabled UPS to
a speed of 40 mph (64 kph), a route that allows the move from a scheduled maintenance program to a
vehicle to maintain this speed for as long as possible condition-based maintenance program, which means
can be mapped. fewer replacements parts are required, as described in
more detail in the next section.
A second approach to cutting fuel consumption is
to monitor and reduce idling time. A UPS truck Financial Benefits. Some of the same changes that
idling for more than 10 seconds consumes more fuel have resulted in social and environmental benefits
than stopping and restarting the engine. Providing reduced fuel consumption and improved route
telematics information to the drivers and management efficiencyhave also led to financial gains from the
team (see Figure 2) has reduced the amount of time telematics project.
drivers leave their trucks idling by 15 minutes per day.
Given that a typical UPS delivery truck can burn 0.5 A key performance indicator for UPS is energy
gallons (1.9 liters) of fuel for each hour spent idling14 consumed per 1,000 packages (see Figure 3). Because
of efforts such as telematics, UPS has been able
14 Gaines, L., Vyas, A., and Anderson, J. Estimation of fuel
use by idling commercial trucks, 2006 (available at http://www. 15 According to Clean Air Counts (http://www.cleanaircounts.org/
transportation.anl.gov/pdfs/TA/373.pdf). documents/ToolKit.pdf).

6 MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 2010 University of Minnesota
 Telematics at UPS: En Route to Energy Informatics

Figure 3: Gigajoules per 1,000 Packages (U.S. Operations)

(Source: UPS, 2009)

to keep energy consumption reasonably constant of vital mechanical and electrical functions on each
despite a shift in business from an 80/20 commercial/ vehicle, without having to take the vehicle out of
residential mix to a 70/30 mix during the period 2002 service (see Figure 4). Thus telematics enables UPS
to 2007. Residential delivery requires more driving mechanics to base starter motor replacement on the
and more stopping, and the telematics program number of cycles of each motor and the amount
fortunately came on stream as UPS was adjusting to a of voltage it draws when it is used. Telematics has
more energy-demanding business pattern. also helped UPS engineers determine that, in some
situations, it is not an expensive fuel injector that
In addition, the telematics project has led to needs to be replaced, but an inexpensive O-ring.
decreased costs resulting from increased efficiency
in maintaining its vehicle fleet. Cutting a vehicles For safety and regulatory purposes, drivers are
idling time not only reduces fuel consumption but also required to report at the end of each day any problems
extends the useful life of the vehicle due to reduced with their vehicle. However, this meant that subtle,
engine running time. non-safety related issues could go unnoticed. Not
recognizing such changes can increase the likelihood
Before telematics, UPS could not know the exact of a breakdown during package delivery, an expensive
condition of a vehicle. Now it is able to more event. The telematics project has removed this cause
precisely identify what components should be of vehicle failure, with consequent savings for UPS.
replaced for a particular problem. Previously,
mechanicsespecially if they were inexperienced
with a specific engine typewere sometimes inclined ENERGY INFORMATICS AT UPS
to adopt a replace-and-test approach to fixing a
problem. As a result, they often used more parts than For nearly two years, two of this articles authors
necessary and more components ended up in the have been investigating how organizations are
waste. using information systems to become greener (e.g.,
to reduce waste, reduce fossil fuel consumption,
The move from scheduled maintenance to condition- and track toxic products). As we studied the UPS
based maintenance16 has also had a financial impact. telematics project reported in this article, and other
As described earlier, parts were often replaced when green information systems, we reflected on the larger
there was considerable life remaining. For example, issues that we were observing and on how various
with a scheduled maintenance program, a starter components are connected and interacting. This led
motor would be replaced every 18 months, regardless to us developing the Energy Informatics Framework17
of the number of stops a particular truck had made. (Figure 5).
Now, UPS mechanics have detailed daily visibility
17 Watson, R. T., Boudreau, M.-C., and Chen, A. J. W. Information
16 Williams, J., Davies, A., and Drake, P. Condition-based Systems and environmentally sustainable development: Energy
maintenance and machine diagnostics, Kluwer Academic Publishers, Informatics and new directions for the IS community, MIS Quarterly
1994. (34:1), 2010, pp. 23-38.

2010 University of Minnesota MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 7
Watson et al. / Telematics at UPS: En Route to Energy Informatics

Figure 4: A Report on the Mechanical Status of a Truck

This framework posits that three types of technology trucks embedded within the road system. Because
can be present in an intelligent energy management the road system is fixed, UPS varies the flow of
systemflow networks, sensor networks, and trucks to reduce energy consumption. As this case
sensitized objectswith these elements being demonstrates, optimizing truck flows requires highly
integrated into a single system by an information granular information and complex algorithms.
system. At UPS, the road to energy informatics is
paved with bricks constructed from extensive daily A sensor network is a set of spatially distributed
telematics data collected from its fleet of vehicles. connected devices that reports the status of a physical
object or environmental condition.
A flow network is a set of connected components that
supports the movement of continuous matter (e.g., At UPS, the sensor network, which is part of the
electricity, oil, air, and water) or discrete objects companys package flow technology, is a vast network
(e.g., cars, packages, containers, and people). Flow that tracks and reports the status of packages. Barcode
networks are often embedded within other flow readers that read package labels are distributed
networks. throughout the package handling process and DIADs
record customer delivery.
The UPS package delivery system has three layers:
packages, trucks, and roads. Both the road network
and the fleet of trucks are flow networks, with the

Figure 5: Energy Informatics Framework

8 MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 2010 University of Minnesota
 Telematics at UPS: En Route to Energy Informatics

A sensitized object is a physical object that a person Energy + Information < Energy18
owns or manages and has the capability to sense and
report data about its use. Through its package flow technology, UPS already
had a sensor network in place that was providing
In the UPS case, there are two types of sensitized highly detailed data about package flows. Other
objects. First, each truck collects data while en route organizations, however, might first have to create a
and reports this on return to the depot. This data is sensor network to gather sufficient data to support
used to optimize the interface with the road system the optimization of a particular flow network. UPS is
flow network. Second, each package is a sensitized still gaining new insights from the data it collects via
(barcoded) object; data about packages is used by UPS telematics and package flow, and it is likely that this
to optimize the use of its fleet of trucks. stream of data will yield insights for several years.

The fourth element of an Energy Informatics Because flow networks are ubiquitous in the modern
Framework is an information system that ties together economy, the general principles of the UPS telematics
the other elements (sensor network, flow networks, project, as captured in the Energy Informatics
and sensitized objects) within and across flow Framework, can potentially be applied to many
networks to provide an integrated solution. organizations.

While UPS has long used information systems to

increase operational efficiency, the telematics project LESSONS FOR IS LEADERS
has increased the volume of data available for analysis
and enables UPS to detect additional opportunities to The UPSs telematics project and the Energy
improve efficiency. Its telematics project collects data Informatics Framework provide four important
to provide a comprehensive picture of how two energy lessons for IS leaders.
consumption systems (the road network and the
truck fleet) interact (see Figure 6). The path of every 1. Recognize That Domain Knowledge is
package on every truck on the road system can be Critical to Project Success
tracked, and the data collected during this process can
be analyzed to reduce the energy consumption across The small team in UPSs Roswell depot innovated,
prototyped, investigated, and refined the telematics
both the road network and the truck fleet.
concept for many years. Collectively, the team
The UPS telematics project illustrates the power members have around a century of UPS experience,
of information to change the energy equation: ranging from sorting and loading to senior

Figure 6: The Two Energy Consumption Systems at UPS

18 This equation indicates that the efficiency of an energy-consuming

system can be increased by an appropriate information system.

2010 University of Minnesota MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 9
Watson et al. / Telematics at UPS: En Route to Energy Informatics

management roles. This team created a prototype and 3. Use the Power of Information to
refined it until it worked in the field and then handed Change Behavior
it over to corporate IS to formalize and manage.
Domain knowledge is frequently the key to systems UPS drivers, like most employees, want to improve
success,19 and in this case, UPS started with a very safety and efficiency, but until they received
high level of domain knowledge and then grew it information from the telematics project, they did not
rapidly through iterative field development. The know what behaviors to change. Comparative data can
Roswell team was given sufficient opportunity to also be a great motivator (How am I doing relative to
repeat frequently a cycle of prototyping and learning. other drivers? How is our depot compared to similar
ones?). As the American Psychological Association
Controls were also put in place to ensure the resulting notes, When it comes to persuading people to
innovations would fit within the corporate strategy. By conserve energy, the message everybody else is
scheduling periodic reviews with senior management, doing it works better than trying to appeal to peoples
including members of UPSs Management Committee, sense of social responsibility, desire to save money, or
everyone could see the plans, progress, and results of even to their hope of safeguarding the earth for future
what was being tested and implemented at the Roswell generations.21
depot. As the Roswell team was building its domain
knowledge, the Management Committee was also 4. Prepare for Energy Informatics
gaining domain knowledge about how the project fit
Every business and organization should consider how
with its strategic goals. As a result, innovation was
it might be able to exploit telematics. They should
accelerated, and the UPS Management Committee
set up a working group to identify their major flow
had an integrated understanding of the innovation so
networks and start to exploit the power of information
that adoption could proceed quickly and smoothly.
to optimize those networks and reduce energy costs.
In effect, UPS created a small, finely focused R&D
They should set up a cross-functional team to identify
center outside of the IS group but under the purview
the products bought or made that, if sensitized, could
of corporate governance to ensure alignment with
provide information to reduce energy consumption.
corporate goals.

In a hypercompetitive world, many businesses are

trying to innovate, and it is the speed of innovation
CONCLUDING REMARKS
and adoption that become critical. UPS has in place The Energy Informatics Framework provides a
a set of processes that enable rapid accumulation of way of thinking about the role of IS in reducing an
telematics knowledge and a direct connection between organizations carbon footprint. UPSs telematics
the telematics team and corporate management. project clearly shows how energy informatics
principles can be applied to reduce energy
2. Create and Exploit Opportunities for consumption. IS leaders have added information
Digital Data Generation to many aspects of business operations to improve
competition, service and many other elements. Now,
UPSs Roswell team recognized that there was an it is time to add information to the energy equation
untapped digital data setthe data collected every to contribute to solving what is probably the most
day by each trucks built-in automotive bus. The team significant problem facing our world.
could envisage some potential uses of this data and
decided to build a system to capture it. Too often firms
look to capture only data that is a direct byproduct ABOUT THE AUTHORS
of essential transaction processing while ignoring
other sources that might reveal how to improve their Richard T. Watson
businesses and support strategic goals.20 Richard Watson ([email protected]) is the J.
Rex Fuqua Distinguished Chair for Internet Strategy
and Interim Head of Information Systems at the Terry
College of Business, the University of Georgia. He
has published in leading journals in several fields as
19 Davis, G. B. and Olson, M. H. Management Information Systems: well as authored books on data management and
Conceptual Foundations, Structure and Development (2nd edition),
McGraw-Hill, 1985. electronic commerce. His current research focuses
20 Piccoli, G. and Watson, R. T. Profit from Customer Data by
Identifying Strategic Opportunities and Adopting the Born Digital
Approach, MIS Quarterly Executive (7:3), 2008, pp. 113-122. 21 See http://www.apa.org/releases/peerpressure.html.

10 MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 2010 University of Minnesota
 Telematics at UPS: En Route to Energy Informatics

primarily on green IS and IS leadership. He has

delivered invited seminars in more than 30 countries
for companies and universities. He has been president
of AIS, co-chair of ICIS, and a senior editor for MIS
Quarterly. He co-leads the Global Text Project, is a
visiting professor at the University of Agder, Norway,
and is a consulting editor to John Wiley & Sons.
Marie-Claude Boudreau
Marie Claude Boudreau ([email protected].
edu) is an Associate Professor at the Management
Information Systems Department of Terry College of
Business, University of Georgia. She has researched
the organizational change induced by information
technologies and information systems, such as
integrated software packages and open source
software. More recently, she has been investigating
the impact of information systems on organizational
culture, ecological sustainability (Green IS and
Green IT) and system agility. Dr. Boudreaus
research has been published in journals such as
Organization Science, Information Systems Research,
MIS Quarterly, Journal of Management Information
Systems, and others.
Seth Li
Seth Li ([email protected]) is a second-year Ph.D.
student in the Management Information Systems
Department of the Terry College of Business,
University of Georgia. His research interests include
the impact of information systems, such as web
personalization, on business-to-consumer electronic
commerce and ecological sustainability (Green IS
and Green IT).
Jack Levis
Jack Levis ([email protected]) is Director of Process
Management on the Corporate Engineering staff of
United Parcel Service. His group is responsible for
providing operations technology solutions. Under
Levis direction, UPS has completed the integration
of multiple operations systems requiring extensive
system engineering and usability provisions. This
includes UPSs award-winning package flow
technology suite of systems, which has dramatically
changed how UPS operates its pickup and delivery
operations, and has resulted in a reduction of over 30
million miles driven per year.

2010 University of Minnesota MIS Quarterly Executive Vol. 9 No. 1 / Mar 2010 11
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